COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED — 2026 SCMR 227 SUPREME-COURT

Case information

Citation: 2026 SCMR 227 SUPREME-COURT
Court: Supreme Court of Pakistan
Year: 2026
Reporter: SCMR
Parties: COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED
Subject matter: Tax & Customs
Provisions referred to: S. 140---R; Income Tax Ordinance (XLIX of 2001); Income Tax Ordinance

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD VS PAKISTAN LNG LIMITED. R.210C(3)---Income Tax Rules, 2002---Income Tax Ordinance (XLIX of 2001), S.140---Recovery of tax from third parties---Immediate recovery---Validity of Rule 210C(3). Department relied upon Rule 210C(3) of Income Tax Rules, 2002 which provided that recovery could be effected on the same day on which notice under Section 140 of Income Tax Ordinance, 2001 was issued. Held, that Rule 210C(3) of Income Tax Rules, 2002 was contrary to requirements of Section 140 of Income Tax Ordinance, 2001. Section 140 requires Commissioner to set a date in notice for recovery purposes. Therefore, any rule permitting immediate recovery was inconsistent with statutory requirement. Rules framed under delegated legislation are subordinate to the statute itself and must yield where inconsistency exists. Section 140 does not envisage immediate or mechanical recovery but requires issuance of notice providing reasonable timeframe. Possibly seven days notice may be considered reasonable, however, reasonableness depends upon facts and circumstances of each case. Setting a date for payment is a substantive requirement and not a mere procedural formality. A notice seeking recovery on the same date defeats the very purpose of setting a date and renders statutory safeguard meaningless. Appeals filed by Department were dismissed.

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